MasterCard, together with Advanced Payment Solutions (APS), allpay, Sulion and Prepaid Financial Services (PFS) were involved in a cartel, agreeing not to compete with each other for the authorities’ custom. According to PSR, in this manner, the providers may have denied the councils access to cheaper products, restricting their ability to provide better quality services to vulnerable people.
The cards in question were used by the councils to distribute welfare payments to the homeless, asylum seekers, victims of domestic violence and other vulnerable members of society. They can be used by the cardholder to pay for goods and services without needing access to a bank account, since emergency funds and benefit payments are uploaded to them.
The cartel was organised at a time when the National Prepaid Cards Network, sponsored by MasterCard, brought together several public sector bodies which were potentially interested in prepaid cards. They not only agreed not to poach each other’s customers but also colluded on the allocation of potential business contacts that were developed via network events. Although these practices did not restrict card recipients from enjoying their full benefits, they did however force councils top pay higher fees than in a competitive market, while the firms also had no incentive to improve the scope of their services.
“This investigation and the significant fines we have imposed send a clear message that the PSR has zero tolerance for cartel behaviour,” Chris Hemsley, the managing director of the PSR, said. “This case is particularly serious because the illegal cartel behaviour meant there was less competition and choice for local authorities. This means they may have missed out on cheaper or better-quality products which were used by some of the most vulnerable in society.”
